CANBERRA, AAP – Taxpayers might not get anything in return for $4 million granted to a company who want to see if it is a good idea for a new coal-fired power station to be built in north Queensland.

Department of Industry, Science, Energy and Resources senior official Rachel Parry conceded it was okay if the company, Shine Energy, does not end up with a bankable feasibility study.

“It’s been 14 years since a coal plant has been built in Australia,” she told a Senate estimates hearing on Monday evening.

“This is a market sounding to determine whether or not the market thinks this is a worthwhile investment.”

It was a “legitimate outcome” if the money does not result in a bankable feasibility study, Ms Parry said.


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The auditor-general has questioned the process used to grant $4 million to Shine Energy, with a review noting the company did not meet eligibility requirements.

The feasibility study was a Morrison government election promise to appease the Nationals.

Meanwhile, energy analysts argue the Morrison government’s plan for a so-called “gas-fired” economic recovery will lead to a dead end.

The Institute for Energy Economics and Financial Analysis’ report has lead to a rebuke from the oil and gas industry’s peak body.

“Natural gas has a vital role in improving environmental outcomes across the globe, particularly across Asia, as switching to natural gas provides an opportunity to lower emissions quickly,” APPEA boss Andrew McConville said.

APPEA has recently announced its climate policy, which supports net zero emissions by 2050.

The oil and gas group have pointed to modelling from the International Energy Agency, which has modelled various global scenarios for fuel demand, based on varying levels of emissions reduction policies across the world.

In one scenario, where net zero is achieved by 2070, coal demand drops while gas demand grows by 2040.

The growth in gas is mainly in India and China, with declines in advanced economies.

But the IEEFA says gas cannot compete on price compared to renewables.

“The very rationale for embarking on a gas-fired recovery plan post COVID-19 has been removed,” analyst Bruce Robertson said.

“This failure to acknowledge the current global energy transition away from fossil fuels and into sustainable, clean renewable energies is leading Australia’s economic recovery policy to a dead end.”

The Morrison government has announced five gas fields it wants to open up to support exports and manufacturing.

One of those is the Northern Territory’s Beetaloo Basin, with $50 million in grants on offer for companies who want to drill into it.

Mr Robertson said the price of gas in the NT could not compete with cheaper renewables.

The federal government last year approved a controversial gas field in NSW’s Narrabri, paving the way for the $3.6 billion coal seam project to go ahead.

It has been taken to court by the Environmental Defenders Office.